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CTP · Question #917
(Topic 9) BF Company, a manufacturer of food products, reported financial information shown in the table below for the end of the year. BF Company is subject to covenants under its revolving credit…
The correct answer is D. Minimum current ratio of 1.25:1.0. See the full explanation below for the reasoning.
Question
- (Topic 9)
BF Company, a manufacturer of food products, reported financial information shown in the table below for the end of the year. BF Company is subject to covenants under its revolving credit facility. It is in compliance with which of the following?
Options
- AMaximum debt to tangible net worth ratio of 1.5:1
- BMinimum times interest earned of 3.0 times
- CDividends cannot exceed 15% of retained earnings
- DMinimum current ratio of 1.25:1.0
How the community answered
(39 responses)- A13% (5)
- B8% (3)
- C5% (2)
- D74% (29)
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